New wave of LNG arrives early to benefit TechnipFMC earnings

Tuesday, 30 July 2019
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Franco-US company reports revenue surge and boosts orders for LNG and subsea

LNG Journal editor

TechnipFMC, the Franco-US energy engineering company, signalled a resurgence in energy investment as it posted healthy second-quarter earnings amid a year-on-year increase in orders for LNG ventures in nations such as the US, Mozambique and Russia as revenues also jumped.

However, TechnipFMC reported a drop in net income of 8.2 percent even as its revenues grew along with the company’s backlog of contracts.

Jump

Company revenues jumped 16 percent to $3.43 billion from $2.96Bln in the prior-year quarter, while second-quarter net profits fell to $97 million compared with $105.7M in the same quarter of 2018.

Before the earnings were issued, TechnipFMC announced it had been awarded the engineering, procurement and construction contract by Novatek of Russia and its joint venture partners for the Arctic LNG II project proposed for the Russian Gydan Peninsula of northern Siberia.

TechnipFMC said the Arctic LNG contract was valued at around $7.6Bln. Technip had also worked on Novatek’s Yamal LNG plant in Russia that shipped its first cargo in December 2017.

The company, listed on the Euronext exchange and the New York Stock Exchange, said the year-on-year backlog of orders had soared 73.4 percent by July 2019 to $25.78Bln from $14.87Bln.

“We achieved record inbound orders in the quarter, with total company orders reaching $11.2Bln,” said Chairman and Chief Executive Doug Pferdehirt.

“In Onshore-Offshore, we are benefiting from the new wave of LNG projects,” said Pferdehirt.

“The LNG market growth continues to be underpinned by the structural shift towards natural gas as an energy transition fuel, helping to meet the increasing demand for energy while lowering greenhouse gases,” he added.

“Our demonstrated leadership in this important growth market will continue as we anticipate additional LNG awards in the coming quarters,” stated the CEO.

“In the second quarter, we were awarded the Arctic LNG II project. This award exemplifies our experience in the delivery of large-scale modularized fabrication for harsh environments,” he explained.

“Onshore-Offshore inbound of $8.1Bln was a new record for the business segment, driven by the award of Arctic LNG II,” he added.

In Subsea, first half orders have already exceeded the levels achieved in all of 2018, with inbound of $2.6Bln.

TechnipFMC said its integrated project awards exceeded $3Bln for the first half of the year.

“Importantly, integrated awards have accounted for more than 50 percent of ourinbound orders in 2019,” said CEO Pferdehirt.

“This momentum is evidenced by our recent award for Anadarko’s Golfinho development (for LNG) in Mozambique,” he added.

“TechnipFMC was a first-mover in the country, and this award further strengthens our leadership position. Golfinho is also our largest integrated subsea project to date,” said the CEO.

Pferdehirt concluded that the unprecedented level of order activity demonstrates that the company was winning, with an intense focus on project selectivity and commercial differentiation.

“The strength of these results and significant growth in backlog give us even greater confidence,” he said.

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